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No it is correct. It is correct because the net effect is the result.
that is.... not only blatantly incorrect.... it seems almost blatantly stupid.
If I run a political campaign that succeeds in getting the support of all members of the libertarian party (2%), but loses the support of everyone else (98%), that doesn't mean that the strategy that gained me the libertarian party (effect) support means I will win the election (net effect). The net effects are simply the aggregate of the individual effects ((100-2)<50).
If I tie you to a tire, and yet you still win a foot race, that doesn't prove that dragging a tire makes you faster. It simply demonstrates that your slower performance is still superior to your unencumbered opponents.
Similarly, if you increase the supply of dollars, but increasing demand outstrips the effect, that doesn't mean that increasing supply does not represent a reduction in the value of each dollar, it only means that the decreased value in a high demand atmosphere is still net higher than the per-dollar value was previously.
It's just like when I purchase inventory for my business, a superficial observation would be that I have lost money. But that observation is superficial only because what I have done is to profit from the difference in what I paid for the merchandise and what I sold it for.
....firstly, your model is incorrect because it simply assumes sale. Secondly, I do not see how your model is an effective analogy.
No there is no effect of devaluation when such activity is partly responsible for the greater effects. In other words if the government did not print the money and instead just let the entire economy collapse, which is what Hank Paulson scared the hell out of people with, then the money would have no value at all.
:shrug: you are referencing a particular incident in which the effect of printing may have been beneficial.
Which does not in any way whatsoever impact the point that we are talking about, where all government expenditures represent wealth that they have gotten from somewhere. That government expenditures of funds gained through printing may be beneficial is no different in that regard than the fact that government expenditure of funds gained through taxation can be beneficial. There Ain't No Such Thing As A Free Lunch.
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